‘Chaos’ at property regulator

IT and fidelity fund certificate snags leave estate agents in limbo

Estate agency owners say dysfunctional systems at the industry regulator are creating chaos.

Real Estate Owners of SA (Rebosa) CEO Jan le Roux said about 23,000 candidate estate agents and 13,000 others are in limbo because the Property Practitioners Regulatory Authority (PPRA) is insisting they qualify under regulations in a repealed law. “This is not legally sound,” he said.

Another 45,000 estate agents have to register for their 2023-26 fidelity fund certificates by October 31 and Le Roux fears they will be unable to do so because the PPRA online registration system does not work.

Serious IT and system issues needed to be addressed urgently, he said. A “sizeable” number of practitioners were struggling to obtain fidelity fund certificates — without which they are unable to operate — and his organisation had “repeatedly” raised the issue with the PPRA.

These are just the latest problems besetting the regulator, which replaced the troubled Estate Agency Affairs Board [EAAB] when the Property Practitioners Act came into operation on February 1.

In March, EAAB CEO Mamodupi Mohlala was suspended pending an investigation into allegations received from the Public Service Commission whistleblower hotline. Unpaid service providers are considering legal action, and the watchdog has been the target of three cyber attacks in the past month.

Le Roux said the new act, which replaced the 46-year-old Estate Agency Affairs Act, ushered in several changes, with educational requirements and transformation among the most important.

“But the PPRA was unprepared for the implementation of the new act and regulations, and is battling with interpretation issues.”

As a result, it was insisting 23,000 interns and 13,000 others complete their qualification using regulations in the repealed act and had extended the deadline for them to do so from the end of this month to January 31 next year. “This is not legally sound and it hinders transformation because 30% of those interns are black,” said Le Roux.

Rebosa took the EAAB to court last year on behalf of 833 estate agents who could not work or get paid because the regulator had not issued them with fidelity fund certificates. Gauteng high court judge Fayeeza Kathree-Setiloane ordered the board in March to issue a certificate to each of the applicants within eight days. But since then, estate agency sources said this week, there had been no improvement in PPRA systems.

The regulator’s app does not work and a manual process that takes between four and six weeks is still being used to issue certificates, they said.

Le Roux said undertakings were given in 2017 to replace the IT system but no progress was made even though tenders were solicited. “The so-called app was instead offered but never was and never could be a solution as it is only an alternative entry point to the same defunct system. Millions were wasted on this app,” he said.

If the estate agency issue ended up being unable to operate, he said, there would be widespread fallout. “Apart from what estate agents can earn there are other spin-offs: conveyancing fees, mortgage origination fees, valuations and of course transfer duty.”

One of the PPRA’s service providers, Rural Brands Technologies, has issued a letter of demand for R2.65m. The company created the app designed to register estate agents by verifying their details and employment.

The company’s Nickey Mannya said the PPRA is refusing to pay the outstanding money and the “app is now left untested and unused”. In response, acting PPRA CEO Deli Nkambule said the watchdog has decided not to pay Mannya’s company because of “a number of issues relating to the functionality of the ... app” and the “procedure followed in the appointment of Rural Brands”.

DA MP Emma Powell said contracts that did follow proper supply chain management processes were awarded to small companies that were now furious they have not been paid. “Because these awards did not follow due process, the new board has asked the acting CEO to hold off on payments until the entity is able to satisfy itself that correct documentation can be identified in substantiation of the payments,” Powell said.

“The entity has also been the subject of three serious cyber attacks in the past month, where security breaches appeared to target information that is now the focal point of the forensic investigation into the suspended CEO’S conduct during her tenure at the entity.

“This has exposed further vulnerabilities in the PPRA’s IT system, and has created a number of knock-on delays in the public-facing service space.”

Steven Ngubeni, chair of the PPRA board, referred questions by the Sunday Times to Nkambule. The acting CEO undertook to respond by Friday but failed to do so.